No Longer the Center of the World

So what's a real breakout if this is a false one? What has to happen to convince people that a rally is for real? I struggle over this daily.

To me, if you had to put all of the objections together you would need the following to have a so-called real rally:

1. Massive shorting and put-buying.

2. An explosion of volume.

3. A dramatic and immediate decline in the U.S. deficit.

4. An end to all foreclosures.

5. A big increase in the price of homes.

6. A dramatic decline in unemployment.

7. A steady dollar.

8. Oil back to $40.

9. Gold at $900.

10. Bears at 50% of the bull-bear ratio.

11. A repeal back to 6,500 so this time it can be done right.

12. An admission from Obama that taxes can't be raised right now.

I have bad news for people: You are waiting for Godot. It ain't happening. You are not going to get that combination. You are not going to get anything like it. You might get some sort of transportation confirmation, a new high list that's broad or some great advance/decline numbers, but those are not going to sway the permabears who simply believe that until things get better it is all phony.

Sure, it requires multiple leaps of faith to buy here. But let's go over two leaps of faith that don't seem so "faith-needing" right now: the Ford (F - commentary - Trade Now) and Bank of America (BAC - commentary - Trade Now) offerings. Both of these deals seemed fanciful when they were done just a few days ago. Who would take down hundreds of millions of shares of a shaky automaker or a bankrupt bank, one certified by none other than the professors?

But both turned out to be self-fulfilling. Once they got the money, Ford and BofA were more buyable. That's the nature of the binary function of hundreds of stocks from SunTrust (STI - commentary - Trade Now) to Brandywine Realty (BDN - commentary - Trade Now). They were priced near death until they got the money.

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